Social Security Benefits for Stepchildren

The Contract with America Advancement Act of 1996 (CAAA) was a game changer for interpretation of Social Security benefits for stepchildren. Social Security recognizes stepchildren for Social Security benefit entitlement under specific circumstances when a stepparent retires, dies or becomes disabled. Changes reflected in the Federal Register in August 2010 reinforce the CAAA and considers stepchildren in conjunction with dependency and divorce.

Social Security has three basic divisions--retirement, disability and survivors benefits. These three divisions all pay an annuity or monthly income to qualifying individuals under the appropriate circumstances. Entitlement is restricted to direct relatives in most cases. The regulations allow benefits to some stepchildren in all three divisions. If a stepparent retires, becomes disabled or dies, a stepchild may recover monthly benefits if conditions are met.

The stepparent relationship must exist a year prior to application. Some question existed as to whether a stepchild could be entitled to Social Security benefits if living in the household of a stepparent who qualifies for disability or retirement. The intent of the law seems to be that stepchildren may recover benefits if the stepparent provides half the support, not just that the child lives in the household. The regulations now make it clear that the stepparent must provide at least half the support of the stepchild in order for the stepchild to receive benefits based on the stepparent’s work history. The language relating to "living with" is gone.

Divorce between the stepparent and the child’s natural parent has created a scenario that Social Security has addressed. If the parents divorce, they must notify the Social Security Administration and benefits to a stepchild stop the month after the divorce is final. This precludes a stepchild from collecting benefits from a stepparent no longer affiliated with the family unit. The reasoning is that the natural children of the stepparent should have priority rights to any benefits. Social Security has a maximum that dependents can collect from the worker, and when several collect on the same work history, this decreases percentages to keep within the maximum limit.

Clarification of the regulations places adoptive parents in the same position as a natural parent for interpretation of the Social Security benefits. If a stepchild’s adoptive parent divorces the stepparent, the stepchild is no longer entitled to benefits under the stepparent’s work history. This makes the rights of the children and adoptive children the same under the stepchild benefits and the rules.

Read More: Are Stepchildren Dependants for Health Insurance Reasons?